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Question
Define or explain the following concept
Marginal Cost.
Solution
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RELATED QUESTIONS
In an economy investment is increased by Rs. 300 crore. If marginal propensity to consume is 2/3, calculate increase in national income.
Define marginal propensity to consume
In an economy an increase in investment by Rs 100 crore led to ‘increase’ in national by Rs 1000 crore. Find marginal propensity to consume.
An economy is in equilibrium. Find autonomous consumption expenditure:
National Income =1,600
Investment Expenditure = 300
Marginal Propensity to Consume= 0.8
If the marginal propensity to consume is greater than marginal propensity to save, the value of the multiplier will be (Choose the correct alternative)
(a) greater than 2
(b) less than 2
(c) equal to 2
(d) equal to 5
An economy is in equilibrium. From the following data, calculate the marginal propensity to save:
1) Income = 10,000
2) Autonomous consumption = 500
3) Consumption expenditure = 8,000
Define marginal propensity to save.
An economy is in equilibrium. Calculate the National Income from the following :
Autonomous Consumption = 120
Marginal Propensity to Save = 0.2
Investment Expenditure = 150
An economy is in equilibrium. Calculate Autonomous Consumption from the following :
National Income = 1,250
Marginal Propensity to Save = 0.2
Investment Expenditure = 150
Calculate Marginal Propensity to Consume from the following data about an economy
Which is an equilibrium:
National income = 2000
Autonomous Consumption expenditure = 200
Investment expenditure = 100
Explain the Keynesian psychological law of consumption.
An economy is in equilibrium. Find the Investment Expenditure from the following :
National Income = 750
Autonomous Consumption = 200
Marginal Propensity to Save = 0.4
An economy is in equilibrium. Calculate Marginal Propensity to Save from the following :
National Income = 1,000
Autonomous Consumption = 100
Investment Expenditure = 200
Complete the following table:
|
Consumption expenditure (Rs) |
Savings (Rs) |
Income (Rs) |
Marginal propensity to Consume |
|
100 |
50 |
150 |
|
|
175 |
75 |
……. |
…… |
|
250 |
100 |
……. |
…… |
|
325 |
125 |
……. |
…… |
Write explanatory answer
State and explain J.M. Keynes's ‘psychological law of consumption’.
Define or explain the following concept.
Autonomous Consumption.
Explain the following concepts or give definitions.
Consumption
State whether the following statements are True or False with reasons:
Increase in consumption expenditure is less than increase in income.
Write answers in ‘one’ or ‘two’ paras each :
Explain the concept of saving function.
Write short note on:
Paradox of value
Define 'or' explain the following concept.
Propensity to save
Give reason or explain the following statement
Demand for necessary goods is inelastic.
Answer the following question.
State the objective factors determining consumption function.
An economy is in equilibrium. From the following data calculate investment expenditure :
(i) Marginal propensity to consume = 0·9
(ii) Autonomous consumption = 200
(iii) Level of income = 10000
Answer the following question.
In an economy, investment increased by 1,100 and as a result of it income increased by 5,500. Had the marginal propensity to save been 25 percent, what would have been the increase in income?
What will be APC when APS = 0?
If the income is ₹ 400 crores and consumption is ₹ 250 crores, what will be the APC?
Which or is true?
Which one is correct?
Which of the following is correct?
Complete the following schedule -
| Y | C | APC | MPC |
| 100 | 90 | ? | ? |
| 120 | 108 | ? | ? |
Which of the following statement is true?
MPC = 1 − MPS. It is ______
If MPC is less than one, it follows that ______
Which of the following points are related to The sum of MPC and MPS is always equal to autonomous investments?
If MPC is 0.9, what is the value of the multiplier? How much investment is needed to increase national income by Rs 5,000 Crores
What is "MPS" or the 'marginal propensity' to save?
If the value of Average Propensity to Save (APS) is 0.2 and National Income is ₹4,000 crores, then consumption will be ______
Identify the correctly matched pair from Column A to that of Column B:
| Column A | Column B | ||
| (1) | MPC | (a) | Ratio of Savings to Consumption |
| (2) | APC | (b) | Ratio of Consumption to Income |
| (3) | APS | (c) | Ratio of Consumption to Savings |
| (4) | MPS | (d) | Ratio of Savings to Investment |
Income rises from ₹50,000 to ₹60,000, consumption increases from ₹40,000 to ₹48,000. In this situation, what will be the value of Marginal Propensity to Consume (MPC)?
If in an economy, the value of investment multiplier is 4 and Autonomous Consumption is ₹ 30 Crore, the relevant consumption function would be :
If increase in National Income is equal to increase in consumption, identity the value of Marginal Propensity to Save:
Assertion (A): Saving curve makes a negative intercept on the vertical axis at zero level of income.
Reason (R): Saving function refers to the functional relationship between saving and income.
'Consumption function curve of an involuntary unemployed workers start from some positive level on Y-axis even at zero level of Income'. Justify the given statement.
An Economy is in equilibrium, calculate the Marginal Propensity to Save (MPS) from the following:
- National Income (Y) = ₹ 4,400
- Autonomous Consumption `bar("C")` = ₹ 1,000
- Investment Expenditure (I) = ₹ 70
The value of ______ can be greater than one.
For a hypothetical economy, the government incurs an investment expenditure of ₹ 1,000 crore. If the value of Marginal Propensity to Save (MPS) falls from 0.25 to 0.10. Calculate the value of increase in income due to change in the value of Marginal Propensity to Save (MPS).
Complete the following table:
| INCOME (Y) |
SAVING (S) |
APC |
| 0 | (-) 12 | |
| 20 | 6 |
How is APS obtained from the APC?
APC can be greater than one, but MPC is always less than one. Give a reason to justify this phenomenon.
